2015 (3) TMI 945 - HC - Indian Laws

Non compliance of the order of Debt Recovery Appellate Tribunal (DRAT) for discovery and production of documents - Application under Sections 19(25), 22, 22 (2)(b) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 - Held that - Both DRT and DRAT have held in favour of the respondent bank on the said aspect. There is nothing to show and establish that the respondent bank had documents, but they are being withheld. Whether or not the claim of the respondent bank has merit or should be dismissed or whether the counter-claim of the petitioner has merit or should be dismissed is a matter for determination and adjudication. The legal and factual effect of the reply given by the respondent bank as an answer to the documents sought, is an aspect or fact which will be examined by the DRT and the appellate authority under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. Whether or not any adverse inference could or should be or should not be drawn etc. is again the matter of merit and not an issue which can be prematurely decided at this interim stage and that too in a writ petition under Article 226 of the Constitution. We refrain and do not comment and observe on the said aspects. Lastly, we may note that the petitioner has invoked writ jurisdiction of this Court and the said jurisdiction is normally exercised only when injustice has been caused or legally unsustainable order has been passed. In the present case, interim orders have been passed and the petitioner herein seeks rejection and dismissal of the original claim and striking out of the defence. The authorities have held that this penal and punitive order/direction, in view of the facts on record is not required and justified. We do not see any good ground or reason to interfere and reverse the said finding. - Petition dismissed.

Summary

Issues:
1. Challenge to the order of the Debt Recovery Appellate Tribunal.
2. Application for discovery and production of documents.
3. Applicability of Order XI, Rule 21 of the Code of Civil Procedure.
4. Compliance with the order of discovery and production of documents.
5. Interpretation of legal provisions and inherent power of the Court under Section 151 of the Code.
6. Conduct of the respondent bank in withholding information.

Analysis:

1. The writ petition challenged the order of the Debt Recovery Appellate Tribunal related to a recovery application by a bank against a company for derivative transactions. The company had also filed a counter-claim pending before the Debt Recovery Tribunal.

2. The company sought discovery and production of specific documents related to the derivative transactions. The Debt Recovery Tribunal directed the bank to produce certain documents, and the bank complied by submitting an affidavit and one document. The bank stated it could not provide other documents as they were not maintained. The tribunal adjourned the case without recording the order.

3. The company filed an application against the bank for noncompliance of the discovery order under specific legal provisions. The tribunal held that the application was not maintainable under Order XI, Rule 21 of the Code, as the earlier directions were issued under a different rule.

4. The tribunal found that the conduct of the bank did not warrant a stringent penalty under Order XI, Rule 21. Both the tribunal and the appellate authority held in favor of the bank, stating there was no evidence of willful withholding of documents. The matter of dismissal of claims or defense was deemed premature for determination.

5. The legal provisions and inherent power of the Court under Section 151 of the Code were discussed, citing relevant case laws to support the arguments presented by both parties.

6. The court emphasized that the decision on the merit of the claims and counter-claims should be left to the appropriate authorities under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993. The court dismissed the petition, stating that the penal and punitive order sought by the company was not justified based on the facts presented, and there was no legal ground to interfere with the findings of the authorities.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the court's reasoning behind the decision.